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Congress has approved or renewed several tax relief measures to keep the dream of home ownership alive for both new home buyers and existing home owners this week. One of the biggest relief’s is the extension of Mortgage Insurance (”MI”) tax deductibility.

The legislation itself is no different than what was passed last year. MI premiums are still fully deductible for taxpayers earning up to $100,000, and partially deductible for those with incomes between $100,000 and $109,000. The only difference is that the deduction now applies to policies written through the 2010 calendar year.

Extending MI tax deductibility is a crucial move for many reasons:

• Risky low down payment loans are no longer a viable option and are being replaced by more secure loans with mortgage insurance.
• Mortgage insurance is not only safe and predictable, but it’s also cancelable and packed with several features borrowers want today.
• Consumers today have an increased understanding of how mortgage insurance can benefit them, and the extension of MI Tax Deductibility will help continue that trend.

If you have any questions or would like to better understand if Mortgage Insurance is right for you feel free to drop me an email or give me a call.

Tomorrow morning I leave the cold, rainy and sometimes snowy, Pacific Northwest in pursuit of warmer weather.

Over at the Issaquah Highlands Community Forum (must be a resident to gain access), there continues to be much debate and concern as to wether or not it is a good time to buy a home. In fact, a fellow Issaquah Highlands resident recently inquired about the Year of Year median home price change. I feel this question is worthy of an entire post outlining all the data from 2006 and 2007 and comparing both YTD sales as well as November only sales.

Issaquah Highlands single family homes saw the median home price increase 19% Year To Date, from $549,950 to $652,616, Year over Year. However, the number of units sold are down and days on market have increased indicating that the market has slowed down.

 

Issaquah Highlands single family homes saw the median home price increase 5% during November 2007 compared to November 2006, $581,800 to $610,000. Still, units sold are down and days on market have increased still supporting that the market has slowed in this area.

 

 

I have gone so far as to state in previous posts to say that I do think buyers can make a sound investment at this time. Despite the fact the market has slowed down and inventory is building, home prices have continued to appreciate in certain areas. Even though this market can be challenging for some, if not most, if you can afford it and you find the right home in the right location, investing in real estate in the Puget Sound area can still be a smart move. 

While we are not seeing the kind of gains we used to, we have still seen gains over this past year. I agree that the unabashed crazy increases that we have seen in the past is over for now and that it is not a good time to flip homes, but I still believe in real estate as a long term investment.

If you have any other questions or would like to see any other stats, please let me know.

People often ask me what do I think of the “sub Prime” lending industry and the “mess” that it has caused recently.

I think that the need to help people to get into a home is always important, however, I like to encourage people who want to buy to purchase within their own budgets. The sub-prime had and still does have a place in the home buying industry. It has been an interesting line to walk on as a lender. You have clients that really need it and can afford it. They understand the upsides and the pitfalls of taking out higher risk mortgages. If a home buyer understands these risks, have the financial resources when and if the products change then it can be a GREAT thing. It is the many clients who purchase without the full knowledge of how these products can touch their lives. Those clients who do not have the financial resources to hold them through the interest hikes.

I would like to say that IT IS UP TO THE LENDER to explain this process THOUROUGHLY and then the borrower needs to be responsible for the loans they sign up for. There are still 100% loans with GREAT rates for the buyers that can afford it and have the financial resources to make it work. There is also the FHA loan which requires as little as 3%. There is even talk that FHA may restructure the down payment into lower restrictions but with higher interest rates to absorb the bigger risk. FHA also allows for some past credit blemishes. Still a great program! The 2nd mortgage that helps to avoid the Private Mortgage Insurance is getting harder to get. Many lenders are requiring higher credit scores and larger down payments. Private Mortgage Insurance (PMI) may become more prevalent again. It is now tax deductible for many buyers. You will need to check with your lender if you are one of them. I love the lending market now. It allows for borrowers to once again to plan when and if they want to buy and not pressure them into purchasing now because the market may be buying them out of a qualifying position!

How do I feel about what the governments is doing for those clients who need to be bailed out? Well that is a whole other subject. If you really want to talk about that one, you will need to reply and ask me about my opinion

***Cartoon provided by Maine Cartoons***

We all know that the Seattle real estate market has been shifting and changing over the past few months. From Seattle to Issaquah, Bothell to Renton and everywhere in between, homes and condos are taking longer to sell and sellers are not being able to command the same kind of premiums as they once used to. This is not to say that ALL homes won’t sell quickly and for at or near their asking price. But those scenarios are becoming harder and harder to find as buyers are in more of a position of power than they once where. One way to get through these challenging times is to consider whether or not to sell, or if renting is a viable solution for you. A few things to think about when weighing your options are:

• Does the mortgage you have allow you to rent out your property?
• If you live in an area with an HOA, will they allow you to rent out your property?
• Will rent cover your holding costs? If not, can you afford the difference?
• Can you handle being or afford to hire a landlord/property manager?
• What type of insurance coverage should you have?

In the recent months, I have had several clients that have chosen to rent out their properties for the time being and with plans to re-evaluate selling once the market is more favorable for sellers. With proper planning and a sound strategy, we have been able to reap the rewards from this choice.

If you are in a similar situation, maybe it’s time to consider if this could be the right choice for you. Just make sure that if you do decide to rent out your home, that you are prepared to do the proper due diligence to make sure you are protecting yourself and what is probably your largest asset. Screening potential tenants for the best possible fit, abiding by fair housing regulations and laws, and having adequate insurance are just a few things you will want to make sure you do to protect yourself.

If you think this might be a good solution for you and need help wading through all the details, feel free to shoot me an email - I would be happy to help.

It’s that time of year again. We are all stuffed from Thanksgiving dinner and quickly running out of leftover turkey. The temperature starts to drop and we get the occasional snow flurry. Holiday lights start going up on homes.

You know what that means? For those that celebrate the Christmas holiday, it’s time to pick out a fresh Christmas tree.

I’m old school so I can’t succumb to buying an artificial tree that I can use over and over. Some will criticize how un-environmentally friendly that is. My comment - TOUGH $&@!.

I need my fresh tree fix. For those of you that are in the same boat as me, I thought I would share a few of my favorite tree farms in the area.

 

Red-Wood Christmas Trees - 13925 Redmond-Woodinville Rd NE, Redmond (425-482-6795)

Trinity Tree Farm - 14237 228th Ave. S.E., Issaquah (425-391-8733)

Carnation Tree Farm - 31523 N.E. 40th St., Carnation (425-333-4510)

Crown Tree Farm - 13005 424th Ave. S.E., North Bend (425-888-1506)

Mountain Creek Tree Farm - 6821 440th Ave. S.E., Snoqualmie (425-888-1770)

Holiday Mountain Trees - Highway 118 and Southeast 104th St., Snoqualmie Ridge (253-838-7979)

For those that want to be a bit more adventurous and try a new tree farm not on this list, the Pacific Northwest Christmas Tree Association has put together quite an extensive list of tree growers in Washington state. And there are also the local pre-cut trees stands in shopping mall parking lots or places like Home Depot and Fred Meyer. But you will pay a price; the cost is significantly higher and the experience leaves something to be desired.

And if you know of any other places or wish to share your experiences about a special tree search, please leave a comment.

Do you have little or no credit lines or limited credit period? If you have a friend or a relative with great credit, become an authorized user on their revolving credit cards. Become an authorized user on a spouse or parents account. The line will show the history of that account on your credit report.

How should you select which card will improve your FICO score the most? Here are the most important criteria:

• Revolving account
• At least 5 years old (the older, the better)
• High or significantly large available credit
• Low balance carried (preferably paid down to $0 every month)
• Perfect payment history.

Current Rates

30 Year Fixed: 5.625% (APR 5.752%) - Lower

30 Year Fixed with 10 Year Interest Only: 6.25% (APR 6.363%) - Unchanged

40 Year Fixed: 6.50% (APR 6.615%) - Higher

5/1 ARM (2/2/6 caps): 5.50% (APR 6.530%) - Lower

5/1 ARM 10 Year Interest Only Payments: 5.625% (APR 6.834%) - Unchanged

FHA/VA 30 Year Fixed: 6.00% (APR 6.467) - Lower

JUMBO (Non-Conforming) Rates

30 Year Fixed: 6.625% (APR 6.752%) - Lower

30 Year Fixed with 10 Year Interest Only Payment: 6.75% (APR 6.867%) - Lower

5/1 ARM: 6.750% (APR 6.878%) - Higher

5/1 ARM Interest Only: 6.875% (APR 6.915) - Higher

Conforming loan limits are currently up to $417,000 and Jumbo loan limits are $417,001-$650,000. Quotes above are based on 30 day pricing with a 1% loan fee and a credit score of 680 or better. Quotes are also based on full loan documentation files and a minimum of 5% down. If you are planning on putting less than 20% down you will need Private Mortgage Insurance or a second mortgage to cover the difference.

The programs above are only a sample of what is available. Rates were published Monday, December 3, 2007 @ 10am and are subject to change.

For further information on any of these programs or additional programs or questions about improving your credit score, please feel free to email me or give me a call on my direct line (425) 820-0601 or my mobile.

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